Childcare Costs £15,000 A Year, Daycare Trust Survey Finds

Working parents are now spending up to £15,000 a year on childcare as costs rise and fewer families receive help with the financial burden, a survey by the Daycare Trust shows.

Nursery costs have risen by nearly 6% in a year, while 44,000 fewer families are getting help with childcare bills since the April tax credit cut, figures compiled by the Daycare Trust show.

The price of nursery care in Britain is rising above inflation with the hourly rate for a child aged under-two up 5.8% from 2009/10 to 2010/11.
The increase for a child aged two and over is 3.9%, while in the same period wages have remained stagnant, only increasing by 0.3%, the survey found.

The average cost for a week of part-time care (25 hours) now exceeds £100 in many parts of Britain. In London the average price has rocketed to £130.

The average bill for a British parent using 25 hours of nursery care for 50 weeks of the year for a child under the age of two is £5,103.
The most expensive nursery recorded by this year's survey costs £300 for 25 hours care, or £15,000 for a year's childcare.

By cutting the maximum level of support available through the childcare element of Working Tax Credit from 80% of costs to 70%, the average claim has fallen by over £10 per week, the Daycare Trust said.

Anand Shukla, chief executive of Daycare Trust said the figures were "bad news for families": "These above-inflation increases in the cost of childcare are.. heaping further pressure on their stretched budgets as wages remain stagnant and less help is available through tax credits.

"Daycare Trust warned that the government's decision to cut tax credits would mean that some families found that they were no longer better off going to work once they had paid for childcare."

The Daycare Trust is calling on the government to increase the proportion of costs which can be claimed under the childcare element of Working Tax Credit (and Universal Credit) to 80%, with a higher rate of 100% for families on the lowest incomes and those with disabled children.

They also want a wider range of children to benefit from the free early education entitlement and are calling for ministers to extend the provision to all two, three and four-year-olds by 2015. Self-employed workers should also be entitled to childcare vouchers, the Trust said.

This costs the low-income working families that receive it more than £500 per year and 44,000 fewer families are receiving this help with childcare costs, the authors of the report said.

The cost of childminders has also risen by 3.2% for a child under two, and 3.9% for a child aged two and over. The study also found more than half of local authorities said that parents had reported a lack of childcare in the previous 12 months, the trust found.

Charity 4Children said the survey results demonstrated the "cocktail of stress" felt by British working parents.

Chief executive Anne Longfield said: "Parents are finding themselves trapped in a double whammy of needing more help with childcare because finances are tight at the same time that the Government is reducing its own spending in this area.

"The result is a cocktail of stress, juggling childcare and for some the difficult decision of giving up work.

"Helping them through these difficult times has to be a priority - locally and nationally - and this is why we are now carrying out our annual Children's Centre Census."

Parent's website Mumsnet said worries about the high costs of childcare are expressed frequently online.

Co-founder and chief executive Justine Roberts said: "While this Government has taken some positive steps like extending free childcare for some two year olds, changes in tax credits actually leave more families struggling to meet childcare costs.

"If the government seriously wants to meet its stated aim to make the UK the most family-friendly country in Europe then, frankly, there's a long way to go."